[Federal Register: January 22, 2003 (Volume 68, Number 14)]
[Notices]
[Page 3071-3072]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22ja03-87]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47188; File No. SR-CBOE-2003-01]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by The Chicago Board Options
Exchange, Incorporated To Amend CBOE Rule 9.3A To Allow In-Firm
Delivery of the Regulatory Element of Continuing Education
January 15, 2003.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 9, 2003, The Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II and III below, which Items have been prepared by the
Exchange. The Exchange filed the proposal pursuant to Section
19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) \4\ thereunder, which
renders the proposal effective upon filing with the Commission. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6). The CBOE provided the Commission
written notice of its intent to file the proposal on December 26,
2002.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend CBOE Rule 9.3A, Continuing Education
for Registered Persons, to permit the in-firm delivery of the
Regulatory Element of Continuing Education by member organizations.
Currently, this computer-based training is administered to registered
persons by an outside vendor at its locations. The text of the proposed
rule change is available at the CBOE and at the Commission.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the CBOE included statements
concerning the purpose of and basis for its proposal and discussed any
comments it received regarding the proposal. The text of these
statements may be examined at the places specified in Item IV below.
The CBOE has prepared summaries, set forth in Sections A, B and C
below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The CBOE proposes to permit member organization delivery of the
Regulatory Element of the Continuing Education Program (``Program'').
The Program is designed to keep industry participants up to date on
products, services and rules, and is composed of a Regulatory Element
and a Firm Element. The Regulatory Element is computer-based training
that covers ethical, sales practice and regulatory matters, and
requires that each registered person complete this training on the
occurrence of their second registration anniversary date and every
three years thereafter. A registered person who fails to complete the
training will be deemed inactive, and may not conduct or be compensated
for activities requiring registration. The Firm Element requires member
and member organizations to provide to their registered employees
having direct contact with customers ongoing training that is
specifically tailored to their business.
At the recommendation of the Securities Industry/Regulatory Council
on Continuing Education (``Council''),\5\ the CBOE proposes to adopt
amendments to CBOE Rule 9.3A to permit member organizations to
administer the Regulatory Element of the Continuing Education Program
to their registered persons by instituting firm programs acceptable to
the Exchange. Currently, the Regulatory Element is administered only at
vendor locations. The proposed rule requires that member organizations
meet certain conditions for in-house delivery relating to the security
of the training delivery environment. The proposed rule amendments set
forth the delivery requirements as specified by the Council.
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\5\ The Council is comprised of representatives from broker-
dealers and self-regulatory organizations whose duties include
recommending and helping develop specific content and questions for
the Regulatory Element, as well as minimum core curricula for the
Firm Element. The Council has developed a model under which member
organizations may deliver the computer-based training in-house.
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The proposed rule change is substantially similar to rules of The
American Stock Exchange LLC, The New York Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc.\6\
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\6\ The proposed rule change is identifical in substance, and
substantially similar in wording, to Amex Rule 341A(4), NYSE Rule
345A, Interpretation /03, and NASD Rule 1120(a)(6).
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2. Statutory Basis
The CBOE believes that the proposed rule change is consistent with
Section 6(b) of the Act \7\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \8\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to prevent fraudulent and manipulative acts and practices,
and to remove impediments to and perfect the mechanisms of a free and
open market and a national market system. The Exchange also believes
that the proposed rule change is consistent with Section 6(c)(3)(B) of
the Act.\9\ Under that Section, it is the Exchange's responsibility to
prescribe standards of training, experience and competence for persons
associated with Exchange members and member organizations. The Exchange
has proposed this rule change to establish an additional mechanism for
the administration of the Regulatory Element of the Program, which will
help to enable registered persons to satisfy their continuing education
obligations.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(c)(3)(B).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission
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may designate, it has become effective pursuant to Section 19(b)(3)(A)
of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ At any time within
60 days of the filing of the proposed rule change, the Commission may
summarily abrogate such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposal is
consistent with the Act. Persons making written submissions should file
six copies thereof with the Secretary, Securities and Exchange
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of
the submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for inspection and copying in the Commission's
Public Reference Room. Copies of such filing will also be available for
inspection and copying at the principal office of the CBOE. All
submissions should refer to file number SR-CBOE-2003-01 and should be
submitted by February 12, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-1346 Filed 1-21-03; 8:45 am]
BILLING CODE 8010-01-P